His theory: Productivity was high in the early phase of the recovery because large, capital-intensive companies were able to meet rising demand, without hiring, by working their machines harder. But now the expansion has spread to companies that are less capital-intensive and have to hire as soon as demand for their goods and services picks up. Shepherdson fears that if the Fed’s low rates stimulate strong growth in output, companies will quickly run out of people to hire and the competition for labor will drive up wages, leading to inflation.